In Pertemps Recruitment Partnership Ltd v HMRC (Upper Tribunal – 11 March) a company (P) operated recruitment agencies which provided staff to its customers.
Some customers made overpayments. P returned some of these overpayments to the customer or set them against other liabilities.
However in some cases P did not refund the overpayments. At the end of each financial year P included these overpayments as receipts in its profit and loss account. Initially P treated these overpayments as taxable receipts.
Subsequently it submitted claims for error or mistake relief on the basis that the effect of the CA decision in Morley v Tattersall 22 TC 51 was that these payments were not its property and that it should not be required to account for tax on them.
HMRC rejected the claims and the First-tier Tribunal dismissed P’s appeal distinguishing Morley v Tattersall on...
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